Risk management in Scrum – Insights

I am writing this post after exchanging tweets with @flowchainsensi.

The Nokia test provides criteria to measure the adequacy of Scrum implementation. If we have ScrumBut (aka inadequate Scrum), then we should not expect the accomplishments in terms of higher velocity, better quality and increased customer value.

Even while we are implementing ScrumBut, we should strive to show some value from using Scrum. This value will allow us to remove handicaps for Scrum implementation and therefore improve our score in Nokia test.

ScrumBut introduces risks to the project. Such risks should be managed using the rigor of Risk Management (RskM) process. PMBOK® and CMMI® have in-depth addressing of RskM details. Traditionally, software development is driven by risks. There are two drivers that can help us start brainstorming for risk identification.

  1. Risks originated from ScrumBut.
  2. Risks originated from not achieving the value which management expects as a result of using Scrum.
I suggest implementing weekly RskM as 30 minutes meeting to:
  1. Monitor the risks
  2. Update risks status
  3. Identify new risks
  4. Create actions to address risks

Such meetings and the outcomes tasks are planned in the sprint backlog.

Using Scrum to manage Process Improvement


Process Improvement (PI) projects are known to lack momentum to deliver quick results that derives value to the business. Though the PI team may have the required skills and motivation, however, the lack of results fades the importance of PI.

PI is vital apart from the industry. Organizations embark into PI initiatives hoping to solve business problems, improve productivity, reduce defects, and to cope with changes.

PI projects fail because of the inherent change in focus and redefinition of the problem. Having Scrum as evolutionary framework for managing PI projects can help in addressing the turbulent conditions accompanying them.

It’s worth mentioning that implementing certain practices (e.g. Agile) should not be considered a process improvement. It’s more a transformation initiative. PI is characterized that the solution is unknown.

Characteristics of PI

Process Improvement or PI is like sailing in unchartered waters. Those who have the courage can discover new destinations and increase their knowledge. If you are complacent, others will discover better ways and you may not be able to compete.

PI effort fraction– The output from the PI effort can become the norm of the whole organization in the near future. Both practitioners and PI professionals co-work on the PI effort to achieve business objective. A typical business objective can possible be to reduce defects found by the customer by 50%.

The story starts when we are unhappy with the current situation and we like to move to a new destination. For example, we want to reduce defects in our products; however, we don’t know how our processes should be. Not knowing the destination adds other sphere of complexity to PI projects.

Discover Journey- We spend most of the project time in learning to uncover the real problems. We collect data to provide objective understanding of the situation. We analyze potential factors that could contribute to the problem. We are uncertain about the real measures of success; we keep refining these measures as we progress in the project. Findings, can initiate the need for more discoveries.

Harvesting the outcome- We spend lot of effort exploring the possible solutions to address the identified causes. Once we select the solution we begin cycle for implementation or product development. We are unsure whether we solved the problem and realized the ROI till we measure the performance after the solution is implemented.

Schedule commitment- The fact that PI is discovery focused raises greater need to find innovative ways to demonstrate progress on short time intervals. Management can discontinue the project if we kept doing discovery without showing quick results to cope with the urgency of the problem. Having meaningful findings and intermediate results can be key requirement for visibility and securing the continuation of the project.

Budgeting- How to reply to management if they ask you to reduce the defects found by the customer by 50% in three months? The key is to identify root causes at the earliest to have understanding of possible solutions to address them. If there is an imposed time limit, then, this might limit the options and can lead us to reach a solution that is not aligned well with the real issue.

A turbulent PI project

Low speed- A factory is not able to refurbish the high volume of returned boxes they receive monthly. The understanding was they need find way to increase the refurbishment speed. They were looking for a solution to help increase the productivity.

The factory can only refurbish 60,000 out of the 200,000 boxes they receive monthly.

Focus shift- The discovery phase has proved that 140,000 of the boxes should not be received in the first place. This has re-focused the project to other groups. Also, it has redefined the problem. If only the eligible boxes are sent to the factory, then there would be no problem in terms of their productivity.

Cost of Poor Quality- It was estimated that the annual cost of refurbishing the wrongly received boxes is $10,000,000. Management focus was changed to how to stop the drain of money, instead of increasing the productivity of the factory.

More groups- The problem became inter-organizational wide and required hand-offs with other departments. The attention turned to solve a problem at large that is far beyond of being an issue with the refurbishment center.

Business value- No value would have been gained from solving the problem as it was originally defined. The real value came from discovery and exposing unexpected facts.

Scrum as framework for PI projects

The turbulent nature of PI, continuous change in focus, not knowing the product and constant change makes Scrum a suitable project management framework. PI projects similar to the above example can be easily terminated as almost the focus has been directed toward different priority. Setting goals at short sprint (two weeks) is key advantage to the project.

The built-in structure for inspect and adapt allows the project to change focus towards different problems. The high interaction inherent in Scrum helps to maintain momentum and increase the sense of urgency towards solving cross-organizational problems.

Improvement Backlog

Improvement Business Value Deliverables Stakeholders Priority Estimate (story-point)



Reduce returns by 50% $5M annual savings Critical
create Value Stream (end-to-end) Sales, Customer Op, Factory, Vendors, Transportation, Provision, Billing 100
Analyze hand-offs of Value Stream
Time study  for sample returns VH
60 VH
60 H
Identify causes of return 60 M
Statistical analysis of findings Sameh 13 L

Improvement Backlog (IBL) can be vital for driving the project work. The IBL consists of:

  • Improvement stories: These should have money value attached to each as expected ROI.
  • Discovery stories: These are the deliverables which if produced and studied can help in deriving intelligent and unexpected facts about the causes of the problem.

We cannot have improvement stories without having first discovery stories.

Because of change of focus in PI projects, the stakeholders are highly dynamic. The sprint demo serves to synchronize among stakeholders and create a sense of ownership on the problem. As project focus is changed, the attitude of stakeholders will change too. They can become supporters or roadblocks.

Product Owner (PO) She is the person that mostly impacted by the existing situation. She is ready to defend the cause of the project and finance it. The Scrum Team should translate the pains of the PO into stories in the IBL.

Scrum Team (ST) in PI projects is formed of Practitioners, Process Analysts, Database Analysts, Statisticians and other Business Owners. The team uses the findings to derive what should be added to the IBL. The team heavily relies on the PO to help providing details of the business processes and rules. The team should be highly interacting and on daily basis. The activities of the team require regular meetings with various business owners. The team should implement mechanism for internally reviewing the work product.

Scrum Master (SM) This role is currently debatable in the Scrum community. It is even more questionable in PI projects. She helps the project by ensuring having unbiased re-focusing and re-definition of the problem. The project management background of the Scrum Team tends to conflict with this role.

Why am I here? According to Ken Blanchard, “The key to successful leadership today is influence and not authority”. This saying applies squarely to the role of Scrum Master. The Scrum Master facilitates 1) the ability to cope with change, and 2) the ability to deliver in regular cadence. These two practices are missed in traditional PI projects.

Traditional PI projects lack the momentum to survive as the focus is changed. Agile PI projects are run by facilitators instead of the highly analytical people of the tradition PI world.  This helps the project to evolve to produce better value to the business.

Table of Acronyms

PI Process Improvement
IBL Improvement Backlog
PO Product Owner
PM Project Manager
SM Scrum Master

References and links

  1. Mark A. Nash, Sheila R. Poling and Sophronia Award: “Using Lean for Faster Six Sigma Results”.
  2. Ken Schwaber and Mike Beedle: “Agile Software Development with Scrum”.
  3. Larry L. Constantine: “Beyond Chaos- The Expert Edge in Managing Software Development”.
  4. Jim Highsmith: “Agile Project Management”
  5. Mary Walton: “The DEMINGS Management Method”.
  6. Mike Cohn: “Agile Estimating and Planning”.

Discounting the role of Scrum Master?

In Scrum we have:

– The product owner (PO) is responsible on the project and involves the customer and other stakeholders in each iteration.
– PO along with the team estimate the user stories and the team pull what they can commit to.
– The team is self organized and sign-off for their tasks.
– The team are free to add or update tasks any time.
– Risks are impediment which are daily tracked.
– No formal management reporting is required.
– Many retrospectives are conducted not exceeding one hour and asking what went, what didn’t, what we should do. Continue reading

Scrum master episode

As a project manager at a software vendor for financial solutions, your manager asked you to develop certain list of features. Market has changed and we need to quickly respond with new release in four months. Your manager, he is right, wanted a plan with weekly status report. You can only use 3 developers from the product as the core developers, while the rest if required, you should look for in other products or hire. You’re Scrum savvy; you want to provide reliable commitments. HOW? Continue reading

Risk management in agile/ Scrum

I believe the Scrum frame-work itself is built to address risks. I managed CMMI® program which at heart of its level-3 is risk management and requirement to organize risks into taxonomy relevant to the organization. This taxonomy describes risks categories and attributes that in my opinion are addressed directly if we strictly apply Scrum. I think risk management is so powerful in the world of traditional project management. It reinforces the illusion that we can have a right plan at the beginning.
The advantage of risk management in traditional project management is getting the team together in up-front to assess the possible threats that the project might encounter in the future. Based on those threats the project plan is adjusted so it can weather the proposed risks. Also, it helps to gain extra budget from up-front in case the risks were materialized. Continue reading